HANOVER, Germany Representatives from Volkswagen and Germany's biggest industrial union said Friday they had agreed to increase working hours at plants in western Germany by more than four hours a week to 33 hours without any increase in pay.

The agreement between VW and the IG Metall union fell short of the 35-hour week sought by the carmaker as part of efforts to drastically cut production costs for its vehicles such as its flagship Golf, which are selling strongly but bringing in little profit.

The deal, which applies to all six of VW's western German factories, also included guarantees of job security for all employees at the factories through 2011.

The union won a promise that VW will build the future model of its Golf compact mainstay as well as another unspecified high-volume model at its base factory in Wolfsburg, and that the Wolfsburg plant will be used to its full capacity of 460,000 vehicles per year. Currently the sprawling plant is not being fully used.

Plants in Hanover, Kassel, Emden, Braunschweig and Salzgitter also got production guarantees.

Volkswagen's board of directors is to make decisions in November on where the company will invest in production. CEO Bernd Pischetsrieder had said the future Golf model could be made at another plant.

"These binding and concrete product promises secure the work force through 2011 and beyond in all six west Germany production locations," said IG Metall negotiator Hartmut Meine.

Shares of Volkswagen were up 1.2 percent to €68.30 (US$86.83) in Frankfurt trading.

The deal was a typical arrangement for Volkswagen, which has a history of working out compromises with the powerful union. It mirrors a push among other large German enterprises to get employees to work additional hours for no additional pay.

Volkswagen had sought to extend the work week from the current 28.8 hours. Under the current deal, workers must increase their workweek only to 33 hours for no additional pay, and the company must start paying overtime for hours beyond that.

IG Metall was further backed by a wage agreement with Volkswagen struck in 2004 that saw the company promise no forced layoffs or cutbacks through 2011.

Kerberos

09-30-2006, 07:48 PM

Volkswagen had sought to extend the work week from the current 28.8 hours. Under the current deal, workers must increase their workweek only to 33 hours for no additional pay, and the company must start paying overtime for hours beyond that